I have had this happen before on several occasions. Bad motherboard, bad RAM and bad CPU were the three causes, on three separate occasions. A fourth time I had a bad riser card, but I doubt that is the issue here. To eliminate the simplest option though, did you validate the cable (VGA/DVI) is connected properly? I once spent an hour trying to figure out why I couldn't get my system to work, when I had the VGA cable plugged into the wrong card. Yes, I'm that dumb.
If you need XP, perhaps you could try to run in through Virtual Box, or VMWare on a newer machine. I assume that as long as your host machine has a PS2 port it will work for you.